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Govt dishes out country's largest budget of RM322.5 bln to beef up healthcare, economy
By Niam Seet Wei & Nurul Hanis Izmir
KUALA LUMPUR, Nov 6 -- A total allocation of RM322.5 billion has been proposed for Budget 2021, the biggest ever in the country’s history, to shore up the economy, safeguard livelihoods and beef up the frontliners to secure the country's steady path of recovery from a healthcare crisis that spooked the world.
More healthcare-related reliefs, incentives and allocations for equipment formed the vital part of the Perikatan Nasional government-led Budget 2021 themed “Resilience As One, Together We Triumph.”
Businesses, small, medium and big, were not left out. The potential of the gig economy and the need to provide the right platform in terms of education, funding and safety net was also deliberated.
The budget also provides tax reliefs for individuals to boost purchasing power, as well as empower women entrepreneurship, differently-abled people, vulnerable groups and indigenous people, making the budget tabled by banker-turned Finance Minister Tengku Zafrul Abdul Aziz today an inclusive budget in every sense of the word.
"The government has placed the priority on protecting the people above all else," he said in Parliament here, Friday as the country battles the third wave of COVID-19 with daily cases hitting up to 1,000.
Last year, Budget 2020 saw an allocation of RM314.7 billion, which was a revised number from the initial budget estimate of RM297 billion, derived from the fiscal stimulus injection.
Budget 2021 was guided by five strategies, namely curbing the COVID-19 pandemic and strengthening public health, safeguarding the welfare of vulnerable groups, empowering the role of government-linked companies (GLCs) and civil society, and ensuring the sustainability of public resources and services.
Of the total Budget 2021, RM236.5 billion (73.3 per cent) will be channelled to operating expenditure, RM69 billion (21.4 per cent) to development expenditure, and RM17 billion (5.3 per cent) to the COVID-19 fund.
The Education Ministry will continue to receive the largest allocation worth RM50.4 billion, accounting for 15.6 per cent of the total budget.
Meanwhile, RM17 billion will be channelled to the COVID-19 Fund, in addition to a RM1 billion special allocation to stem the third wave of coronavirus.
To appreciate women’s contribution to the nation and empower women entrepreneurship, Tengku Zafrul said RM95 million would be allocated for a special micro-credit financing scheme through the National Entrepreneur Group Economic Fund (TEKUN Nasional), Majlis Amanah Rakyat (MARA) and AgroBank.
Meanwhile, he said about 1.4 million taxpayers are expected to benefit from the income tax reduction initiative, which aims at easing the financial burden of the people during these trying times.
"The government has agreed that the income tax rate for individual residents will be reduced by one percentage point for the taxable income range of RM50,001 to RM70,000 which is expected to benefit 1.4 million taxpayers," he said.
To leverage and empower Bumiputera entrepreneurs, a total of RM4.6 billion will be provided for four purposes.
“For every challenge faced, there will be opportunities. In the context of COVID-19, although businesses are affected, there are still industrial sectors that are still growing rapidly such as medical equipment, e-commerce and delivery, as well as educational technology," he said.
According to Tengku Zafrul, for investments in key sectors, RM1 billion would be provided under the technology and high value-added investment promotion package.
This fund aims to support R&D investments in aerospace, as well as electronic clusters in the industrial areas of Batu Kawan, Penang and Kulim, Kedah.
Meanwhile, the National Development Scheme worth RM1.4 billion will be introduce by Bank Pembangunan Malaysia to support the implementation of domestic supply chain development and increase the production of local products such as medical equipment.
Meanwhile, the Maritime and Logistics Development Scheme, Sustainable Development Financing Scheme, Tourism Infrastructure Scheme and Public Transport Fund will be extended until Dec 31, 2023 with the availability of funds worth RM3.7 billion.
Of the total funds under these schemes, RM2 billion will be introduced through loans from banking institutions under Bank Negara Malaysia, which is aimed at helping small and medium enterprises affected by the COVID-19 pandemic.
On the loan guarantee, Tengku Zafrul said that so far, RM25 billion has been given through Credit Guarantee Corporation.
“The government will increase guarantee up to another RM10 billion, with RM2 billion allocated specifically for Bumiputera entrepreneurs.
“For corporate companies involved in highly-skilled industries such as oil and gas, and aerospace, a RM3 billion guarantee is reserved under the Danajamin PRIHATIN Guarantee Scheme.
"This scheme will be extended until 2021 with improved terms and conditions.
“I have a belief. How the Malaysian nation is a brave nation, a strong nation, that when we can agree with each other, we can do extraordinary things.
“If before this we once unanimously agreed with the establishment of the COVID-19 Fund, then in this august House, let this Budget be the canon of our unity for the welfare of the people,” he said.
-- BERNAMA
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